Ineos Refining consults on DB pension closure

If it does not do so, it faces the risk of having to close its Grangemouth petrochemicals plant near Falkirk, Scotland. The plant, which provides nearly all of Scotland’s petrol and diesel, will close before 2017, unless its 1,300 employees agree to the closure of the pension scheme, which has a £200-million deficit.

The utilities organisation plans to switch employees into a defined contribution pension scheme. Existing employees who contribute 6% into the new scheme will receive an employer contribution of 11%, while new staff will receive a 9% employer contribution for their 6%.

Tom Crotty, group director at Ineos Refining, said: “This is one of the most expensive sites to operate, we are continuing to lose money, we need to sort out the cost base and a big portion of that is an anachronistic pension scheme.

“We do not want to change the remuneration to something ridiculously mean and miserable, but to actually replace it with something much more market-based, because what we’ve got now is so far out of the market, it’s crazy.

“It’s so expensive. We’ve got a train coming down the track, unless we do something about it, it’s going to be a mess.”